Even members of the local authorities don’t know the details of the government’s contract with SITA who run the island’s incinerator, an Onchan commissioner has revealed.
Rob Callister said despite the rocketing cost to local authorities for waste disposal charges at the incinerator, the precise details of the agreement between government and SITA had never been published and the costs imposed by SITA per tonne of waste disposed of remained a mystery.
‘These costs should be explained to the rate payer, but even the local authorities don’t know the financial arrangements with SITA. The details should be made public. I also don’t know who sets the so-called ‘‘gate fee’’ (the charge per tonne of waste disposed of),’ he said.
In 2012 the government decided to remove its subsidy towards the costs of waste disposal and by 2018, local authorities will be expected to pay the full government subsidy for the incinerator of around £5.7 million per year.
In 2013 the cost of disposal per tonne was £57 for domestic waste and £120 for commercial waste.
This year the cost is £99 and £160, and by 2018 the price will have rocketed to £161.35, with charges for domestic and commercial waste on an equal footing.
At the time, the DOI admitted the rise equates to an average annual rates increase of £22 per household each year from 2012 to 2018.
‘The DOI sets a rate and charges us per tonne of rubbish disposed of at the Energy from Waste Plant (incinerator), but what we don’t know is how much the DOI is being charged by SITA. I feel the local authorities are being used as a cash cow by the government,’ he said.
‘The government says it is a subsidised rate that is charged but we don’t know that, if we can’t have access to the figures. In 2018 the charge per tonne will be £161. Are you telling me that’s what the government has been paying since the contract with SITA started in 2004 and they only break even or make a profit in 2018?
‘It’s putting extreme pressure on local authorities, particularly those with little or no reserves.’
By 2018, he said rate payers in Onchan could be paying £515,200 per year for waste disposal. The contract with SITA to run the incinerator lasts until 2029.
The policy of placing extra burden on the local authorities who then have to charge through the domestic rating system is also questionable because it is inequitable: ‘Rates are not means tested whereas income tax is, and that’s an important consideration,’ he said.
As a result of the hike in fees. emphasis has been placed on recycling more material rather than disposing of it in the bin. The government’s 10 year waste strategy is to recycle 70 per cent of domestic waste by 2022.
But Mr Callister suggests this may be a flawed strategy because the energy produced by burning waste produces income for the government, which will be lost if 70 per cent of rubbish is recycled.
Since 2004, the plant has processed around 500,000 tonnes of waste, generating an estimated 260,000 megawatts of electricity, equating to £10 million in income. Any income generated via the sale of electricity is used to offset the operating cost of the plant but this could be lost.